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1 China's Biodiesel Producers Seek Brand new Outlets As Hefty EU Tariffs Bite

By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel manufacturers are looking for new outlets in Asia for their exports and exploring producing other biofuels as supply to the European Union, their most significant purchaser, dries up ahead of anti-dumping tariffs, biofuel executives and experts said.

The EU will enforce provisional anti-dumping tasks of between 12.8% and 36.4% on Chinese biodiesel from Friday, striking over 40 companies including leading producers Zhejiang Jiaao, Henan Junheng and Longyan Zhuoyue Group in an export company that was worth $2.3 billion in 2015.

Some bigger manufacturers are eyeing the marine fuel market in China and Singapore, the world's top marine fuel center, as they seek to out already falling biodiesel exports to the EU, biofuel executives said.

Exports to the bloc have fallen greatly because mid-2023 amidst examinations. Volumes in the very first 6 months of this year plunged 51% from a year previously to 567,440 lots, Chinese custom-mades information revealed.

June deliveries diminished to just over 50,000 lots, the lowest since mid-2019, according to customizeds data.

At their peak, exports to the EU reached a record 1.8 million loads in 2023, representing 90% of all Chinese biodiesel exports that year. The Netherlands was the top importer in 2023, taking in 84% of China's biodiesel shipments to the EU, followed by Belgium and Spain, Chinese customizeds figures revealed.

Chinese producers of biodiesel have delighted in fat profits recently, making the many of the EU's green energy policy that gives aids to companies that are utilizing biodiesel as a sustainable transport fuel such as Repsol, Shell and Neste.

Many of China's biodiesel producers are privately-run small plants utilizing scores of employees processing waste oil gathered from millions of Chinese dining establishments. Before the biodiesel export boom, they were making lower-value goods like soaps and processing leather products.

However, the boom was short-lived. The EU started in August in 2015 examining Indonesian biodiesel that was believed of preventing tasks by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel believed to be priced artificially low and damaging local producers.

Anticipating the tariffs, traders equipped up on used cooking oil (UCO), lifting rates of the feedstock, while prices of biodiesel sank in view of shrinking demand for the Chinese supply.

"With hefty rates of UCO partly supported by strong U.S. and European demand, and free-falling item rates, business are having a bumpy ride surviving," stated Gary Shan, chief marketing officer of Henan Junheng.

Prices of hydrotreated veggie oil, or HVO, a primary kind of biodiesel, have halved versus last year's average to the present $1,200 to $1,300 per metric heap and are off a peak of $3,000 in 2022, Shan included.

With low prices, biodiesel plants have actually cut their operations to a lowest level of under 20% of existing capability usually in July, below a peak of 50% last seen in early 2023, according to Chinese consultancies Sublime China Information and JLC.

Meanwhile, shrinking biodiesel sales are boosting China's UCO exports, which experts forecast are set to touch a brand-new high this year. UCO exports soared by two-thirds year-on-year in the very first half of 2024 to 1.41 million lots, with the United States, Singapore and the Netherlands the leading locations.

OUTLETS

While lots of smaller sized plants are most likely to shutter production forever, larger manufacturers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are exploring new outlets consisting of the marine fuel market in your home and in the essential hub of Singapore, which is utilizing more biodiesel for ship fuel blending, according to the biofuel executives.

Among the producers, Longyan Zhuoyue, concurred in January with COSCO Shipping to utilize more biodiesel in marine fuel.

Companies would also accelerate planning and building of sustainable aviation fuel (SAF) plants, executives stated. China is expected to reveal an SAF mandate before the end of 2024.

They have actually likewise been searching for new biodiesel customers outside the EU bloc, in Australia, Japan, South Korea and Southeast Asia where there are regional mandates for the alternative fuel, the authorities added.

(Reporting by Chen Aizhu